The allowance rises to £7,090 (£6,830) for the 65 to 74-year-old age band and £7,220 (£6,950) for 75s and over.

These age-related allowances start to disappear when total income hits £19,500.

The 10% tax band is stretched from the first £2,020 to £2,090 while the 40% top tax rate starts at £32,400 - up from £31,400.

You can have total earnings of £39,385 (up from £38,215) before hitting the 40% top rate income tax band.

Inheritance tax limits rise

The value of estates where inheritance tax starts to bite goes up from £263,000 to £275,000. The "tax-free slice" will increase to £285,000 in 2006-07 and £300,000 the year after that.

Capital gains allowances become more generous

From April 6, the capital gains tax allowance rises from £8,200 per person per tax year to £8,500.

Isa limits survive

The current Isa limits - £7,000 for a maxi investment Isa and £3,000 for a mini cash Isa - will remain until the 2009-10 tax year when the Isa scheme ends. The annual investment and cash limits had been due to fall in the 2006-07 tax year.

Same-sex partners to get the same tax benefits as married couples

When the Civil Partnership Act, which gives lesbian and gay couples the chance to obtain equal legal status for their relationship as married heterosexual couples, comes in to force on December 5, "civil partners" will be treated as married couples for tax purposes.

This will give the new status partnerships:

· inheritance tax-free transfers of assets between the partners either during life or on the first death

· the married couple's allowance if one partner was born before April 6, 1935.

But civil partners will no longer be able to claim a "principal residence" each. Those with two homes will have to choose which property on which to pay capital gains tax if it is sold.

Islamic banking comes out of the cold

"Alternative Finance Arrangements" - sharia law-compliant investments and loans which do not pay or charge interest - will now be treated identically to more conventional arrangements. This should enable more Islamic mortgages to be created and stop penalising finance arrangements which depend on regular sales and repurchases of assets rather than involving interest, which is forbidden.

Tax relief continues to roll for low-budget films

Rules making it easier to claim tax against the expense of making British films costing up to £15m are to be extended until March 31, 2006.

But there is another swathe of anti-avoidance measures to stop complex tax-dodging schemes based on films.

Redundant part-timers will now qualify for tax-free help

Part-timers will now be able to join full-time employees in tax-free counselling services and re-training courses when they lose their jobs.

The rules for re-training are also to be relaxed. Courses no longer have to be full time and they can stretch for two years instead of one year.

Computer and bicycle schemes have bugs ironed out

Schemes provided by employers to give employees tax savings through the Home Computer Initiative and a similar scheme to encourage bike use have run into problems. Some tax inspectors have been taxing bike or computer purchasers at the end of the, typically, three year "loan" period.

A new rule will ensure no tax charge arises when the final purchase is made.

Better benefits for employees whose bosses pay for college courses

Employees who receive payments from their employers while they are in full-time education can now receive up to £15,000 a year tax-free, instead of £7,000.

Smaller businesses can opt out of VAT registration

Firms, or self-employed individuals, do not have to register for VAT until their sales (not profits) hit £60,000 a year (up from £58,000).

VAT-registered businesses can deregister if their sales fall below £58,000 a year (up from £56,000).

...And finally, good and bad habits will cost more

Cigarettes will rise by 7p for a pack of 20 on health grounds.

There will be 4p on a bottle of wine, despite claimed health benefits for red wine.